Dawn III: Our new $235m fund

Dawn earlier this week announced the closing of Dawn III — at $235m (£165m), Dawn III is the single largest dedicated B2B venture fund in Europe. We are very pleased to about this outcome as it supports our long-standing thesis that Europe has a tremendous ability and even further potential to create global software leaders.

As with our previous two funds, Dawn III will be dedicated to supporting the most promising early-stage SaaS and FinTech companies in Europe, for whom we continue to see a vast landscape of opportunity.

In SaaS, the transition to the cloud continues to fuel innovation with a second generation of SaaS startups now eyeing up their predecessors as incumbent targets.

Meanwhile, European FinTech companies are taking advantage of an increasingly supportive regulatory environment that is opening up opportunities for nimble home-grown players to quickly scale into European champions.

We’re excited to partner with entrepreneurs who have the vision to take advantage of these exhilarating and rapidly evolving environments and define the next generation of category-leading companies.

Dawn Capital GP Haakon Overli interviewed on Bloomberg TV about European VC and our new fund

Dawn Capital GP Haakon Overli interviewed on Ian King Live on Sky News about European VC and our new fund

Lessons learned and the road ahead

Dawn is a long-term investor. Important parts of the mutual selection process leading up to an investment are to agree a common vision with the founders, and to discuss how the Dawn team and our expertise contribute to a successful long-term partnership. Our goal and our privilege is to join the entrepreneurs’ journey in building a global leader that stands the test of time. But this path is not straightforward and can sometimes get a bit bumpy.

Dawn has both a sector and stage focus — an important differentiator

This is where we come in. Our sweet spot is working with founders when they’ve got their product right and revenues are beginning to scale up. Everything is going right, and everything must change. As they scale up, founders can no longer touch every customer, marketing is a science, finance graduates from focusing on cash to focusing on being strategic. And the product and market that got you here aren’t the ones to get you there.

Over the past decade, Dawn has been fortunate to have shared this journey with some truly outstanding founders — too many to mention and a deepfelt thank you to all of you. And with these experiences behind us, we revel in sharing knowledge among our portfolio companies and helping the next wave of disruptors with everything from growth strategy, to raising follow-on funding from a top-tier US growth fund, to hiring and retaining the best industry talent, through successful IPOs and life as a public stock, and complex trade sales.

Thank you to our LPs

On our fundraise more broadly, we’re pleased in the vote of confidence from our previous backers, whose subscriptions make up 80% of Dawn III, and we’re determined to maintain our track record of top-decile returns for them: Dawn I is already 3.3x distributed, with great companies still remaining, and Dawn II is on target for a similarly strong result underpinned by companies such as iZettle.

Among our new LPs is Peter Bauer, CEO of Mimecast (NASDAQ: MIME; $2.2bn market cap). It’s been our privilege to work with Peter and the board since our time as the first institutional investor in Mimecast (2008), through to IPO (2015) and two years beyond, supporting the company on its journey towards becoming that rarest of beasts, a European ‘double unicorn’.

Stay tuned…

We’ve got lots more exciting announcements in the coming months — please sign up to our mailing list if you’d like to stay up to speed.